World leaders show unity and vow to do no harm

By Alister Bull - Analysis

WASHINGTON (Reuters) - Bretton Woods II it was not, but world leaders achieved a crucial show of unity at their summit to confront recession, promising to revamp the global economic order and remain firmly wedded to free trade.

Old Cold War rivals from the West and former Communist East publicly tied their economic fates together on Saturday and gave themselves until April to hammer out concrete reforms.

"The real value of getting these countries together is to say that they won't do any harm, rather than they will do something for the collective good," said Raghuram Rajan, a former chief economist at the International Monetary Fund.

Leaders vowed to use fiscal policy, as well as interest rate cuts in countries that still had room to ease, to offset the steepest global economic slowdown in decades.

Their gathering, which brought the 20 leaders together for the first time, evoked the 1944 meeting in Bretton Woods, New Hampshire, that created the IMF, World Bank and a foreign exchange rate system closely tied to the dollar.

Host President George W. Bush told reporters he was not sure if the summit would earn a similar place in history, but stressed that it had more modest ambitions as a hastily convened first step towards achieving lasting change.

Among the few solid commitments was a ban on raising protectionist trade barriers for 12 months, and to agree to the long-running Doha round of trade talks by end-December.

There was also a timetable of tasks, focussed heavily on tackling accounting and regulatory issues, which the leaders pledged to complete by the end of March.